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Question 4 (6 Marks) BALANCE SHEET: BANK OF OCHRE RIVER Assets Liabilities and net worth Reserves $ 16.0 Deposits $100.0 Securities 20.0 Advances from Bank

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Question 4 (6 Marks) BALANCE SHEET: BANK OF OCHRE RIVER Assets Liabilities and net worth Reserves $ 16.0 Deposits $100.0 Securities 20.0 Advances from Bank of Canada 0.1 Loans 64.1 The Bank of Ochre River has a desired reserve ratio of 10%. a) Calculate the excess reserves of the Bank of Ochre River. 100 x - 1 : 10 16 - 10 b) What is the maximum amount that the Bank of Ochre River can increase the money supply? 90 410 - 20 c) What is the maximum amount that the entire banking system could increase the money supply? 10 X : 10

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